The separation of cohabiting couples

It’s a question of timing… or is it?

Cohabiting couples who subsequently separate can in certain circumstances make claims for payment of a capital sum under section 28 of the Family Law (Scotland) Act 2006 legislation.  Success will be dependent on whether there has been economic advantage/disadvantage and also if there are children under the age of 16.  However, claims must be raised within one year of the end of the relationship.  This is quite a tight timescale. Sometimes the timing of when the relationship actually ended can be disputed.  Or, whether the couple could really be said to be cohabiting. Unfortunately, a lot of cohabiting couples are also still not aware of the provisions of this legislation.

What can be done if a claim is not, for whatever reason, brought within the one-year period?

We can look to see whether there is an argument that there has been unjustified enrichment.

What is unjustified enrichment?

It is a legal principle on the basis of which a person may seek a remedy in law.  The case of Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1996 331 states that a person may be said to be unjustly enriched at another’s expense when he has obtained a benefit from the other’s actings or expenditure without there being a legal ground which would justify him retaining that benefit.  In another leading case Shilliday v Smith 1998 SC 725 it was clarified that an action must be for a remedy based on the principle of unjustified enrichment.   

What can be claimed?

Claims can be for:

• Restitution (where the applicant seeks the return of property from the other person);
• Repetition (where the applicant seeks repayment of money paid to the other person);
• Recompense (where the applicant seeks to be recompensed for the benefit derived by the other person because of the applicant’s actings).

In Shilliday the pursuer was engaged to marry the defender.  They lived together in the pursuer’s property.  The defender then purchased a property in need of renovation.  The pursuer paid sums directly to contractors and third parties, paid other sums to the defender for materials and herself paid for certain items.  Parties separated and the pursuer sought an order for payment of the sums paid by her both directly and to the defender.  The case was appealed to the Inner House. The court helpfully clarified the remedies sought by the pursuer.  The sums paid by the pursuer directly (for materials, repairs and items) constituted a claim for recompense; she sought reversal of the enrichment by payment to her of a sum representing the value of the benefit.  The money she gave to the defender was a claim for repetition; she sought reversal of the enrichment by ordering the defender to repay the money he had received.

In 2016 the case of Courtney’s Executors v Campbell [2016] CSOH 136 seemed to close the door on applications for unjustified enrichment where a claim under section 28 of the cohabitation legislation had prescribed (time barred). In this case parties cohabited and Courtney contributed £100,000 to the purchase of their home, title to which was held in Campbell’s sole name.  Courtney also contributed to renovations, buying materials and doing work himself. Parties separated.  Courtney did not obtain legal advice within the one year timeframe.  He then died and his executors brought the claim for recompense. In that case the action of unjustified enrichment was dismissed because the statutory remedy (the section 28 claim) which had been open to the parties had not been exercised timeously.  The court held that it excluded any equitable remedy (such as unjustified enrichment) and based on a legal principle known as the doctrine of subsidiarity.

However, the more recent case of Pert v McCaffrey CSIH 5 reviewed and overturned the decision in Courtney’s Executors.  In this case, the court held that “the statutory remedy was one at the discretion of the court and thus not in any way an alternative to the common law claim of unjustified enrichment, where the impoverished party has, within the scope of the law, a right to recovery from the enriched party not dependent upon any judicial discretion”.

So, in certain circumstances there may be a way forward even if the one year deadline for raising proceedings in terms of the 2006 Act has been missed.